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Dive Brief:

Philadelphia's ban on salary history inquiries violates the First Amendment's free speech clause, a federal district court judge said May 1, granting a preliminary injunction temporarily halting that portion of the city's ordinance.

While the "inquiry" portion of the rule has been enjoined, the "reliance" portion of the ordinance — which employers sought to halt as well — remains intact, as Judge Mitchell S. Goldberg noted it did not "implicate speech." The rule, as it stands, would then still prohibit employers from relying on wage history to set pay unless the applicant knowingly and willingly disclosed it.

The ordinance was originally set to take effect in May 2017 but the city agreed to stay implementation until the legal questions were answered.

Dive Insight:

In his opinion, Goldberg notes that "it is not in dispute" that a gender pay disparity exists, but that the evidence did not support the premise that Philadelphia's ban would reduce that disparity. That opinion could set the stage for further challenges to salary history question bans — even a future U.S. Supreme Court showdown, one lawyer told The Philadelphia Inquirer.

The "reliance" part of the ordinance remains intact in this opinion, however, which is an important aspect of a number of the other local bans popping up in various cities and states. Even if an employer learns of an applicant's salary history inadvertently, certain bans — including those in California, New York, and Oregon — do not allow that information to be used when setting pay.

Employers will want to keep an eye on case law in this burgeoning area, especially developments on the Philadelphia ordinance: the city told the Inquirerthat it is currently evaluating its next move.